Owner Financing Mortgage Contract Template for Saudi Arabia

The Owner Financing Mortgage Contract serves as a crucial legal instrument in Saudi Arabian real estate transactions where traditional bank financing is either unavailable or undesired. This document is specifically designed to comply with both the Saudi Arabian Mortgage Law of 2012 and Islamic finance principles, making it suitable for situations where property owners wish to finance the sale of their property directly to purchasers. It includes comprehensive details about the property, payment terms structured in a Sharia-compliant manner, security arrangements, and conditions for title transfer. The contract is particularly valuable in the Saudi Arabian market where Islamic finance principles must be strictly observed, and it provides an alternative to conventional mortgage arrangements while ensuring legal protection for all parties involved.

1. Parties: Identification of the Property Owner (Financier) and the Purchaser (Borrower), including full legal names and contact details

2. Background: Context of the transaction, including property ownership status and parties' intention to enter into Sharia-compliant owner financing arrangement

3. Definitions: Key terms used throughout the agreement, including Islamic finance terminology

4. Sale and Purchase Agreement: Details of the property sale agreement including purchase price and payment structure

5. Property Details: Complete legal description of the property, including title deed number and location

6. Payment Terms: Structure of payments, including down payment, installment amounts, and payment schedule (structured in Sharia-compliant manner)

7. Security Arrangements: Details of mortgage registration and security measures protecting the financier's rights

8. Purchaser's Covenants: Obligations of the purchaser including property maintenance, insurance, and compliance with regulations

9. Owner's Representations: Warranties regarding property ownership, authority to sell, and absence of encumbrances

10. Default Provisions: Consequences of default and remedies available under Saudi law and Sharia principles

11. Transfer of Ownership: Process and conditions for final transfer of property title upon completion of payments

12. Governing Law and Jurisdiction: Confirmation of Saudi law application and relevant court jurisdiction

13. Notices: Methods and addresses for official communications between parties

14. Execution: Signature requirements and witness provisions